Toyota South Africa’s CEO, Andrew Kirby, has raised concerns that the country is on the brink of deindustrialisation and stressed the need for immediate government intervention. Kirby made these remarks during a breakfast seminar hosted by the National Association of Automotive Component and Allied Manufacturers (NAACAM), where the future of South Africa’s automotive industry was a central topic of discussion.
At the event, Kriengkrai Techakanont from Thammasat University in Bangkok shared insights into Thailand’s automotive sector, offering a striking comparison between the two nations. In the late 1990s, South Africa and Thailand had automotive industries of similar size and capacity. However, today, Thailand’s industry outpaces South Africa’s, producing three times as many vehicles and employing over 400,000 people.
Techakanont attributed Thailand’s success to its government’s well-structured and supportive policies, particularly in facilitating the transition to neighbourhood electric vehicles (NEVs). These policies were marked by their flexibility, consistency, and focus on boosting consumer demand while encouraging localisation of components. Thailand has also implemented effective tax incentives and consumer subsidies to accelerate the NEV transition.
The panel discussion highlighted valuable lessons South Africa’s automotive sector could draw from Thailand’s model. Kirby emphasized the importance of bolstering local vehicle production, warning that South Africa is witnessing a surge in imported vehicle sales at the expense of locally manufactured cars. He also noted a worrying decline in component localisation, which underscores the urgent need for a strategic industrial policy that prioritises domestic production.
“South Africa’s vehicle market must support local production if we want to avoid further deindustrialisation,” Kirby said. He added that South African-made cars are perceived to be 6% to 12% more expensive than similar vehicles produced in Thailand, creating a significant barrier to domestic demand. To address this, Kirby suggested implementing tax policies that would make locally assembled vehicles more attractive to consumers, as seen in Thailand.
Professor Justin Barnes of the Toyota Wessels Institute of Manufacturing Studies (TWIMS) echoed Kirby’s sentiments, stressing that successful policy development and implementation are key to thriving industries. Barnes called for a flexible, collaborative approach to policy creation that involves both public and private sector stakeholders to ensure sustainable outcomes.
Both Kirby and Barnes underscored the critical need for government action, warning that without strategic intervention, South Africa’s automotive industry risks being left behind in a rapidly evolving global market.
Main Image: Moneyweb